Increased Likelihood of ECB Rate Hike in September

The possibility of a rate hike by the European Central Bank (ECB) in September has increased. In a report on the 27th, Dutch bank ING stated that the Eurozone economy is showing more resilience than expected despite the ongoing conflict in the Middle East. ING's chief economist, Carsten Brzeski, analyzed the situation where European companies are receiving more orders than their Asian competitors. He explained that headline inflation is gradually rising, and the volatility in oil and gas prices will heighten the need for additional rate hikes by ECB policymakers. The ECB had kept rates unchanged during its monetary policy meeting in July and stated that it would continue to assess whether the rise in energy prices is temporary. Brzeski noted that a September hike could be interpreted as a precautionary measure, reflecting improvements in economic indicators and rising prices. However, he added that whether there will be further hikes after September is a separate issue. He pointed out that fiscal conditions and government bond yields will influence the ECB's judgment. The ECB's next monetary policy meeting is scheduled for September 9-10.

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